Valkyrie, a leading asset management firm in the United States, has announced a temporary halt on its purchase of Ether futures contracts. The decision, made in anticipation of the SEC’s approval of an Ether futures ETF, raises questions about Valkyrie’s chances of being among the first companies to introduce an Ethereum ETF. This article delves into Valkyrie’s recent filing with the SEC, the potential reasons behind their decision to pause Ether futures purchases, and the current landscape of Ethereum ETFs in the United States.
On Friday, September 29, Valkyrie filed a 497 with the SEC, stating that it would cease the purchase of Ether futures contracts and unwind its existing positions. The asset manager cited the need for an amendment to its registration statement, which contemplates the addition of Ether futures contracts to the principal investment strategy of the firm. Until the amendment is effective, Valkyrie will not acquire any new Ether futures contracts.
Bloomberg analyst Eric Balchunas has speculated about the reasons behind Valkyrie’s decision to halt and unwind its Ether futures purchases. He suggested that the SEC may have threatened the firm to cease its activities. Balchunas’ analysis adds an air of intrigue to Valkyrie’s actions, leading to further speculation about the potential obstacles faced by companies seeking to launch Ethereum ETFs in the United States.
Ethereum ETF Landscape
Valkyrie filed its unique Ethereum ETF application with the SEC in August, aiming to convert its existing Bitcoin Strategy ETF to a combined Bitcoin and Ether futures ETF. However, Valkyrie faces stiff competition, as about nine Ethereum ETFs are set to potentially start trading on Monday, October 2. Among these, asset manager ProShares holds three funds, including two combined Bitcoin and Ethereum ETFs. Additionally, VanEck is another frontrunner for the first Ether futures ETFs in the US. The investment manager recently made headlines by announcing its intention to donate 10% of its Ethereum ETF profits to The Protocol Guild, a compensation plan for Ethereum core contributors.
Notably, the potential launch of Ethereum ETFs has had a positive impact on the price of Ether. As of this writing, Ether is valued at $1,676, representing a significant 5% increase in the past week. This rise in price demonstrates the market’s anticipation and excitement surrounding the introduction of Ethereum ETFs, despite the temporary pause in Valkyrie’s Ether futures purchases.
Valkyrie’s decision to halt the purchase of Ether futures contracts highlights the challenges faced by asset management firms in the race to launch Ethereum ETFs in the United States. The SEC’s approval process, potential threats from regulatory bodies, and competition within the market all play a significant role in Valkyrie’s strategic moves. As the landscape evolves, industry players like Valkyrie, ProShares, and VanEck navigate the regulatory landscape while balancing the interests of investors and maintaining their competitive edge.
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